"We are excited to report a set of strong financial results in the quarter. Total net revenue was RMB4.37 billion and Non-GAAP net income was RMB1.83 billion for the third quarter," Mr. Alex Xu, Chief Financial Officer, commented. "At the end of the third quarter, our total cash and cash equivalent(*1) (2) was approximately RMB9.77 billion, and we generated approximately RMB2.37 billion cash from operations. During the quarter, we continued to execute the US$350 million share repurchase program with meaningful progress. The newly approved US$450 million share repurchase program for 2025 further demonstrates our strong commitment to sustainable shareholder returns through dividend and share repurchases."
Mr. Yan Zheng, Chief Risk Officer, added, "We experienced further improvement in overall risk metrics of our loan book in the third quarter as we continued to take a prudent approach in managing risks. Among key leading indicators, Day-1 delinquency rate(*1) (3) was 4.6%, and 30-day collection rate(*1) (4) was approximately 87.4%. The 30-day collection rates reached its best levels in the past three years. As we remain vigilant in risk management under current macro environment, we expect to see relatively stable overall risk performance in the coming quarters."
(12 Including "Cash and cash equivalents", "Restricted cash", "Security deposit prepaid to third-party guarantee companies" and "Short-term investments".)
13 "Day-1 delinquency rate" is defined as (i) the total amount of principal that became overdue as of a specified date, divided by (ii) the total amount of principal that was due for repayment as of such specified date.
14 "30-day collection rate" is defined as (i) the amount of principal that was repaid in one month among the total amount of principal that became overdue as of a specified date, divided by (ii) the total amount of principal that became overdue as of such specified date.
Third Quarter 2024 Financial Results
Total net revenue was RMB4,370.2 million (US$622.7 million), compared to RMB4,281.0 million in the same period of 2023, and RMB4,160.1 million in the prior quarter.
Net revenue from Credit Driven Services was RMB 2,901.0 million (US$413.4 million), compared to RMB3,071.0 million in the same period of 2023, and RMB2,912.2 million in the prior quarter.
Loan facilitation and servicing fees-capital heavy were RMB258.7 million (US$36.9 million), compared to RMB479.2 million in the same period of 2023 and RMB151.1 million in the prior quarter. The year-over-year decrease was primarily due to the decline in capital-heavy loan facilitation volume, and the sequential increase mainly due to increasing capital-heavy loan facilitation volume and lower funding cost for capital-heavy loan facilitation.
Financing income(*) (15) was RMB1,744.1 million (US$248.5 million), compared to RMB1,369.9 million in the same period of 2023 and RMB1,690.1 million in the prior quarter. The year-over-year increase was primarily due to the growth in outstanding balance of the on-balance-sheet loans.
Revenue from releasing of guarantee liabilities was RMB794.6 million (US$113.2 million), compared to RMB1,165.7 million in the same period of 2023, and RMB972.6 million in the prior quarter. The year-over-year and sequential decreases were mainly due to decreases in the average outstanding balance of off-balance-sheet capital-heavy loans during the period.
Other services fees were RMB103.7 million (US$14.8 million), compared to RMB56.1 million in the same period of 2023, and RMB98.4 million in the prior quarter. The year-over-year and sequential increases were mainly due to the increases in late payment fees under the capital-heavy model.
Net revenue from Platform Services was RMB1,469.1 million (US$209.3 million), compared to RMB1,210.1 million in the same period of 2023 and RMB1,247.9 million in the prior quarter.
Loan facilitation and servicing fees-capital light were RMB574.6 million (US$81.9 million), compared to RMB863.9 million in the same period of 2023 and RMB524.4 million in the prior quarter. The year-over-year decrease was mainly due to a lower capital-light loan facilitation volume.
Referral services fees were RMB763.1 million (US$108.7 million), compared to RMB234.2 million in the same period of 2023 and RMB623.5 million in the prior quarter. The year-over-year and sequential increases were mainly due to the increases in the loan facilitation volume through ICE.
Other services fees were RMB131.4 million (US$18.7 million), compared to RMB112.0 million in the same period of 2023 and RMB100.0 million in the prior quarter.
Total operating costs and expenses were RMB2,081.0 million (US$296.5 million), compared to RMB2,892.2 million in the same period of 2023 and RMB2,175.1 million in the prior quarter.
Facilitation, origination and servicing expenses were RMB707.9 million (US$100.9 million), compared to RMB639.8 million in the same period of 2023 and RMB722.2 million in the prior quarter. The year-over-year increase was primarily due to higher collection fees.
Funding costs were RMB146.8 million (US$20.9 million), compared to RMB160.2 million in the same period of 2023 and RMB161.3 million in the prior quarter. The year-over-year decrease was mainly due to the lower average cost of ABS and trusts. The sequential decrease was mainly due to the decline in funding from ABS and trusts and lower average costs.
Sales and marketing expenses were RMB419.9 million (US$59.8 million), compared to RMB529.6 million in the same period of 2023 and RMB366.4 million in the prior quarter. The year-over-year decrease was mainly due to a more prudent customer acquisition approach. The sequential increase was primarily due to an increased number of customers acquired, offset by a lower unit customer acquisition cost.
General and administrative expenses were RMB92.0 million (US$13.1 million), compared to RMB95.4 million in the same period of 2023 and RMB95.1 million in the prior quarter.
Provision for loans receivable was RMB477.5 million (US$68.0 million), compared to RMB509.0 million in the same period of 2023 and RMB849.5 million in the prior quarter. The year-over-year decrease mainly reflected the Company's consistent approach in assessing provisions commensurate with its underlying loan profile. The sequential decrease was mainly due to the decrease in loan origination volume of on-balance-sheet loans and a larger reversal of prior quarters' provision because of improving asset quality.
Provision for financial assets receivable was RMB64.4 million (US$9.2 million), compared to RMB86.9 million in the same period of 2023 and RMB70.2 million in the prior quarter. The year-over-year and sequential decreases mainly reflected the Company's consistent approach in assessing provisions commensurate with its underlying loan profile. In addition, the year-over-year decrease was due to the decline in loan facilitation volume of off-balance-sheet loans.
Provision for accounts receivable and contract assets was RMB108.8 million (US$15.5 million), compared to RMB39.7 million in the same period of 2023 and RMB123.8 million in the prior quarter. The year-over-year and sequential changes reflected the Company's consistent approach in assessing provisions commensurate with its underlying loan profile.
Provision for contingent liability was RMB63.6 million (US$9.1 million), compared to RMB831.6 million in the same period of 2023 and RMB-213.3 million in the prior quarter. The year-over-year and sequential changes reflected the Company's consistent approach in assessing provisions commensurate with its underlying loan profile as well as the change in capital-heavy loan facilitation volume.
Income from operations was RMB2,289.2 million (US$326.2 million), compared to RMB1,388.9 million in the same period of 2023 and RMB1,985.0 million in the prior quarter.
Non-GAAP income from operations was RMB2,315.5 million (US$330.0 million), compared to RMB1,432.2 million in the same period of 2023 and RMB2,021.9 million in the prior quarter.
Operating margin was 52.4%. Non-GAAP operating margin was 53.0%.
Income before income tax expense was RMB2,356.9 million (US$335.9 million), compared to RMB1,478.1 million in the same period of 2023 and RMB2,076.6 million in the prior quarter.
Net income was RMB1,798.8 million (US$256.3 million), compared to RMB1,137.7 million in the same period of 2023 and RMB1,376.5 million in the prior quarter.
Non-GAAP net income was RMB1,825.1 million (US$260.1 million), compared to RMB1,181.0 million in the same period of 2023 and RMB1,413.4 million in the prior quarter.
Net income margin was 41.2%. Non-GAAP net income margin was 41.8%.
Net income attributed to the Company was RMB1,802.9 million (US$256.9 million), compared to RMB1,142.0 million in the same period of 2023 and RMB1,380.5 million in the prior quarter.
Non-GAAP net income attributed to the Company was RMB1,829.2 million (US$260.7 million), compared to RMB1,185.3 million in the same period of 2023 and RMB1,417.4 million in the prior quarter.
Net income per fully diluted ADS was RMB12.18 (US$1.74).
Non-GAAP net income per fully diluted ADS was RMB12.35 (US$1.76).
Weighted average basic ADS used in calculating GAAP net income per ADS was 145.30 million.
Weighted average diluted ADS used in calculating GAAP and non-GAAP net income per ADS was 148.10 million.
(15 "Financing income" is generated from loans facilitated through the Company's platform funded by the consolidated trusts and Fuzhou Microcredit, which charge fees and interests from borrowers.)
30 Day+ Delinquency Rate by Vintage and 180 Day+ Delinquency Rate by Vintage
(MORE TO FOLLOW) Dow Jones Newswires
November 19, 2024 17:00 ET (22:00 GMT)
Comments